2 Warren Buffett Stocks to Buy Hand Over Fist

Warren Buffett’s investment history is hard to match by anyone else. Known as the “Oracle of Omaha,” he is renowned as one of the world’s top value investors. His straightforward investing strategy involves picking well-established companies that are dominant in their respective industries, have effective leadership, solid earnings, and a reliable dividend – all qualities that ensure long-term success.

Over time, the investment portfolio within Berkshire Hathaway, led by Warren Buffett, has consistently surpassed the performance of the S&P 500. To put it into perspective, from 1965 to the end of 2024, Berkshire’s portfolio skyrocketed an astonishing 5,502,284%, while the S&P 500 managed a more modest increase of 39,054% even accounting for dividends.

It’s not surprising at all why numerous investors keep tabs on Buffett’s philosophy and Berkshire Hathaway’s quarterly decisions. Yet, it’s essential to remember that not every stock within Berkshire’s portfolio is a guaranteed success at this moment. If I were starting a portfolio today, there are two stocks of Buffett’s I would consider indispensable, and one I would steer clear of.

Buffett stock to buy: BYD

Typically, Buffett avoids investing in tech stocks, so it seems uncharacteristic that Berkshire would invest in a Chinese electric vehicle (EV) company like BYD (BYDDY). Interestingly, it was actually not Berkshire’s own decision to get involved with BYD; this move was suggested by Charlie Munger, the former vice chairman of Berkshire Hathaway and Buffett’s longtime investing partner.

In China, BYD leads the electric vehicle (EV) production market, creating models such as the Seal, Tang, Seagull, Dolphin, and Han. During the initial six months of the year, the company sold a combined total of 2.11 million battery and hybrid passenger EVs, marking a 31.5% increase compared to the same period last year. Additionally, BYD produces commercial vehicles like electric buses, trucks, and delivery vans. Sales for these products during the first half of the year reached 2.14 million, representing a 33% growth year-over-year.

The impressive sales data is significantly boosting BYD’s annual income. In the initial quarter alone, BYD declared revenue of approximately 170.3 billion yuan (equivalent to around $23.7 billion USD), marking a 36% increase compared to the same period last year. Their profit margin increased by 117%, amounting to roughly 3.75 billion yuan, and their earnings per share surged by 99%, reaching approximately 3.12 yuan, all when compared to the previous year.

I would take a very educated guess that Buffett is pleased with Berkshire’s BYD stake.

Buffett stock to buy: Amazon

In the past, I believed that the Alibaba Group was a significantly better investment in the e-commerce sector compared to Amazon (AMZN). At that time, I felt that Alibaba had greater potential for expansion in its e-commerce services compared to Amazon, which was already well-established with U.S. retailers.

Today, I find myself increasingly appreciative of Amazon, and it’s not just because of their e-commerce side. In fact, I’m a growing admirer of Amazon Web Services (AWS), the substantial revenue generator that is propelling Amazon to a commanding position in the rapidly expanding cloud computing industry.

In the first quarter of 2025, AWS generated an impressive $11.5 billion in profits, boasting a robust profit margin of 39.4%. This figure significantly outperforms Amazon’s North American e-commerce division, which managed only a 6.3% profit margin, and even Amazon’s international sales, which barely scraped by with a 3% profit margin.

I find myself witnessing the significant impact of AWS, particularly fueled by the surge of Artificial Intelligence (AI). This revolutionary technology has reshaped the way businesses operate and how individuals interact. From crafting text and visual content, to ordering meals and processing information, AI is omnipresent. It’s even integral in managing supply chains, critical military operations, and healthcare services.

However, establishing vast data centers for generative AI and machine learning is often financially unfeasible for many companies. This is where AWS steps in, offering a solution by allowing businesses to manage and enhance their AI capabilities on Amazon’s servers, making cutting-edge technology more accessible.

Amazon is pouring a substantial amount of money – around $83 billion last year and projected to be $100 billion this year – into capital investments to grow its data centers to accommodate more work, which will likely lead to significant profits in the future. Currently, Amazon holds the leading position in the cloud computing industry, controlling about 30% of the market share. Microsoft Azure comes in second with 21%, while Google Cloud, owned by Alphabet, has a 12% share.

Buffett stock to avoid: Apple

For quite some time, Apple (AAPL) has held the largest position in Warren Buffet’s Berkshire Hathaway investment portfolio. In fact, at one stage, Apple accounted for over 40% of Berkshire’s holdings due to its groundbreaking smartphones, wearable technology, tablets, and computers that significantly transformed the tech sector. Notably, Apple held the title as the world’s most valuable company for two decades.

However, the luster of Apple seems to be diminishing somewhat. While the iPhone remains a top choice, the latest models fail to ignite the same level of excitement as before among smartphone users due to the absence of revolutionary advancements that once characterized Apple. Unless the new iPhone boasts an impressive, jaw-dropping novelty, many consumers are hesitant to spend $1,000 on an upgrade when their existing devices continue to function effectively.

For the past three years, Apple’s earnings and profits have remained relatively stable rather than showing significant growth, causing it to lose its reputation as an awe-inspiring investment with high potential returns. In fact, even Warren Buffett reduced his ownership in Apple by selling approximately 100 million shares, leaving Berkshire Hathaway with around 300 million shares. While Apple still holds a substantial portion (nearly 22%) of Berkshire’s portfolio, it is evident that this stock has begun to decline in value.

2025-07-22 10:57

2 Warren Buffett Stocks to Buy Hand Over Fist — and 1 to Avoid

Buffett stock to buy: BYD

Buffett stock to buy: Amazon

Buffett stock to avoid: Apple

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